The U.S. Attorney’s Office for the Eastern District of Louisiana announced that Robert Calloway, former executive vice president of New Orleans-based First NBC Bank, pleaded guilty to conspiracy to defraud the bank.
According to court documents, Calloway and other bank officers, including the bank President Ashton Ryan Jr. and Chief Credit Officer William Burnell, conspired to conceal the financial condition of bank borrower Gary Gibbs from the bank’s board of directors, auditors and examiners.
They falsely stated in loan documents that Gibbs was able to pay his loans with cash generated by his businesses, and they hid from the board of directors, auditors and examiners that Gibbs was only making his existing loan payments by getting new loans from First NBC Bank.
Calloway and the other bank officers also concealed the fact they made loans to Gibbs to keep him and his companies off of month-end reports that went to the board, auditors and examiners. These month-end reports listed borrowers who were not paying their loans or whose accounts were overdrawn. By keeping Gibbs and his entities off those reports, Ryan, Burnell and Calloway were able to conceal their scheme and continue lending to Gibbs despite his inability to pay his loans. Calloway also completed loan review forms that were sent to external auditors in which he omitted material information about Gibbs and his inability to pay his loans.
Calloway pleaded guilty to a superseding bill of information charging him with one count of conspiracy to commit bank fraud. The maximum penalty that may be imposed at sentencing for this charge is up to five years in prison; a fine of up to $250,000.00 or the greater of twice the gain to Calloway or twice the loss to any victim; and up to three years of supervised release. U.S. District Judge Eldon Fallon set Calloway’s sentencing for March 16, 2023.
“Today’s guilty plea demonstrates that individuals like Mr. Robert B. Calloway who engage in fraudulent schemes that impact the security of financial institutions will be held accountable,” FBI New Orleans Special Agent in Charge Douglas Williams, Jr. said.
“Today’s plea sends a clear message that bank executives who commit fraud and deliberately deceive regulators will be brought to justice for their actions. I commend our agent and their federal law enforcement partners for their hard work and persistence, which ultimately led to this outcome,” said Stephen Donnelly, acting special agent in charge, Eastern Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection.